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| BondsOnline.com: instant access to and extensive coverage of over 3.5 million stocks, bonds, indexes and other securities covering major and emerging markets and exchanges across the globe. |
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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
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0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| More |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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States go deeper into debt |
NEW YORK (CNNMoney.com) -- The states are broke, and like many consumers, they're borrowing big time to get out of their fiscal binds.
The amount of debt that states are carrying spiked 10.3% last year to $460 billion, according to Moody's Investors Service. The debt is paid for through taxes and fees, making residents ultimately responsible.
The median personal share of this burden jumped to $936, from $865 in 2008. (To see how much the tab is in your state, click here.)
And it's likely that states will turn to the bond markets even more this year as federal stimulus money dwindles, experts said. After all, officials face an additional $12 billion shortfall for the current fiscal year and a $72 billion gap for fiscal 2012, which starts next July 1.
Debt "is a tool to help bridge the gap between the downturn and when the economy starts to recover," said Robert Kurtter, a managing director at Moody's.
States are relying on the debt markets in a variety of ways. With less cash on hand, some state officials are borrowing more to fund capital projects. Other states are engaging in so-called deficit financing, where they issue bonds to cover their budget shortfalls or restructure their debts to lower their monthly payments.
The good news for states is that it's a good time to issue debt. Not only are interest rates are low, but the American Recovery and Reinvestment Act subsidizes interest payments on certain municipal bonds. This is a marked change from late 2008, when the municipal bond markets were effectively closed for many issuers.
To be sure, not every state is ratcheting up its borrowing. Many states have strict laws governing their debt issuance. Some places, such as Nebraska and Wyoming, have virtually no debt. Others have to turn to voters to approve bond proposals.
What the states are doing
Required to close a $684.3 million budget deficit for fiscal 2011, Connecticut is planning to borrow up to $956 million in coming months. (The state ended the fiscal year with a surplus so it likely won't need to take out as much debt.) This move comes after the state issued $916 million in bonds to cover a previous shortfall.
The plan prompted Fitch Ratings to downgrade the state's general obligation bond rating to AA, saying it reflects "the state's reliance on borrowing to address its ongoing fiscal challenges in the context of already high liabilities and large projected structural gaps."
Though Connecticut is still welcomed in the bond markets, state treasurer Denise Nappier warned that officials should not rely on loans as much in the future. The wealthy state already has the highest debt burden per capita at $4,859, according to Moody's.
"We must continue to manage our existing debt as aggressively as possible, and our governor and legislature must avoid additional borrowing to close budget gaps if the state is to avoid the very real prospect of having to pay more for the cost of money," Nappier said last month.
For the complete article visit CNNMoney.com
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| Stuff to look at |
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| BondsOnline Advisor |
Income Security Recommendation January 2013 Issue.
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